Keir Starmer reaction to Budget 2023: what Labour leader said about Spring Statement

Labour has criticised the government’s economic plans, unveiled by Jeremy Hunt in today’s Budget, saying they amount to “sticking plaster politics”.

The Chancellor announced that eligible households with children as young as nine months will be entitled to 30 hours a week of free childcare and pledged a range of policies to support older people who wish to return to work.

Hunt also abolished the £1 million lifetime allowance for pensions savings, in a major boost for high-earners, described by Labour as “a huge giveaway to some of the very wealthiest”.

The Chancellor said a recession would be avoided and inflation would fall dramatically as the economy was “proving the doubters wrong,” but he was accused by Starmer of “dressing up stagnation as stability”.

‘The sick man of Europe’

Addressing MPs, Hunt said the economy would avoid a technical recession – two consecutive quarters of shrinkage – although the Office for Budget Responsibility (OBR) still forecast a contraction of 0.2% this year, a significant improvement on the -1.4% predicted in November.

As part of a package aimed at helping with the cost of living, the Chancellor said the energy price guarantee, which caps average household bills at £2,500, will be extended at its current level from April to June.

Hunt also announced tax breaks on investment for businesses, a significant expansion in childcare support and a number of other measures aimed at boosting economic growth.

The government’s plans were criticised by Starmer, who said that while the economy needed “major surgery” the budget “leaves us stuck in the waiting room with only a sticking plaster to hand”.

He said: “This was a day for ambition, for bringing us together with purpose and intent, for unlocking the pride that is in every community, matching their belief in the possibilities of the future.

“But after today we know the Tory cupboard is as bare as the salad aisle in our supermarket. The lettuces may be out, but the turnips are in. A hopelessly divided party caught between a rock of decline and a hard place at their own economic recklessness. Dressing up stagnation as stability as their expiry date looms ever closer.”

Labour took aim at the decision to abolish the lifetime allowance for pension savings, which currently stands at £1 million, describing the policy as “a huge giveaway to some of the very wealthiest”.

Starmer said: “The only permanent tax cut in the budget is for the richest 1%. How can that possibly be a priority for this Government?”

“The truth is our labour market is the cast iron example of an economy with weak foundations. Our crisis in participation simply hasn’t happened elsewhere, not to this extent, it is a feature of Tory Britain and global excuses simply won’t wash.”

Britain “can’t afford to be the sick man of Europe,” said Starmer, highlighting the lack of investment in the NHS or training new healthcare staff to tackle NHS waiting lists.

Laying out his own plans for a “wider reform agenda”, he said: “Instead of making working people pay, we need to make work pay, move on from growth that is based on insecure, low-paid jobs to growth which comes from good work, from strong employment rights, that can deliver high productivity.”

He added: “Growth from the many for the many, that makes people better off in all parts of our country.”

Hunt also announced changes to the benefits system, toughening sanctions for claimants who fail to meet requirements to look for work or decline reasonable job offers.

While they will be very different in practice to the Investment Zones policy put forward by Liz Truss and Kwasi Kwarteng last year, Hunt confirmed that 12 zones will be created, with up to £80 million of support each for tax breaks and incentives.

In a statement, shadow chancellor Rachel Reeves said: “This Budget was a chance for the government to unlock Britain’s promise and potential. But instead they decided to continue papering over the cracks of 13 years of economic failure.

“The only surprise was a handout for the richest 1% and their pension pots. Growth was downgraded in this Tory Budget, but Labour will not allow us to keep bumping along this path of managed decline.

“With our mission to secure the highest sustained growth in the G7, we will create good jobs and productivity growth across every part of our country. Where the government has thrown in the towel, Labour will build a better Britain.”